Friday, January 9, 2015

What's in a label?

I
first visited USA in 1980's. During my visit, I did buy a few clothes
for myself and my family, because they were very cheap and of
exceptional quality. I had then noticed that each and every garment
had a tag or a label. That was something new, because at that time,
most of the people in India used custom stitched clothes after buying
a piece of cloth from a shop. These clothes naturally came without
any tag or label except for a small identification indicating the
tailor. There were few brands available that sold ready made clothes;
one such brand was Liberty. Most of the ready made clothes however
were unbranded and sold without any tags or labels.

While
examining the labels, I had observed that besides mentioning the
size, there were few symbols printed on the label. I had never seen
these and therefore was very curious. My American host was glad to
clarify that these symbols indicate the way one should care for the
clothes, such as whether to iron with hot iron or not, tumble wash or
not? Spin dry or not? I was quite amused with these symbols because
no tailor in India gave any such instructions and washing machines,
which very few people used anyway, were rather simplistic.

Most
of the clothes, I had bought, had one more line printed on the
labels. All labels certified that the clothes were “Made in USA.”
This again was something new for me. I had assumed that clothes sold
in American stores would be obviously American made and what was the
need for such certification. I had asked my American host about this
and his explanation was that lots of cheap stuff made in Japan comes
to US these days and that is why US manufacturers mention on label
that the garment is made in US.

During
my subsequent visits to US spread over next two decades, I could
notice change slowly taking place. From made in US, the labels first
said made in ROC (Taiwan) or Japan and later names of all kinds of
countries, such as Sri Lanka, Bangladesh, India, Indonesia,Laos and
many other south American countries started appearing on the labels.
Eventually “Made in China” labels started appearing and later
dominating, not only on clothing but also on most of the things
available for sale in stores.

With
the globalization of trade, a product label has become an important
guide for the consumers. Recently, I saw in Singapore, two TV sets of
the same manufacturer, having same specifications. One of them was
priced higher. When I asked the saleswoman to explain why the prices
are different, she clarified that the expensive set is made in Japan,
whereas the other one is made in some other country. I recently saw
another advertisement for a TV set, where it was claimed that the LED
panel was made in Japan-meaning thereby that the other parts are made
somewhere else.

A
stage has come now, when quality of a product can be assessed by its
label. Customers usually assume that a product is of top quality, if
made in Germany or Japan. Next comes ROC (Taiwan) and other countries
follow suit. Chinese products are usually in lower categories, unless
they bear a famous brand name such as “Apple.”

The
price of the product also varies depending upon the label. Usually
products made in ROC or Japan are more expensive than those made in
China. In fact consumers expect that the products made in China
should be cheapest and products made in ROC or Japan would have
better quality though with higher cost.

I
found an interesting write up about behaviour of Japanese consumers
that says that many products that originate in the Peoples' Republic
of China do not have the best of reputation in Japan. A study carried
out in October 2014, by Genron, a Tokyo-based nonprofit
organisation, concludes that a record 93 per cent of Japanese have a
negative impression of China and are not willing to buy clothing that
has a label saying, made in China.

Chinese
manufacturers of clothing items have apparently realised that
identifying the source of their products as made in China is harming
sales in Japan and have come up with a clever trick. They have now
started printing a text "Made in PRC" on the labels for
clothing bound for the Japanese market. The local Japanese consumers
do not understand that the acronym means the product is actually made
in China and are willing to pay higher price.

The
move may give temporary respite, though eventually Consumers are
bound to catch up this little trick. I am reminded of a similar trick
adopted during “No imported stuff days” by manufacturers from a
suburban town not far away from Mumbai; Ambarnath. India had
extremely stringent laws then that banned all consumer product
imports for decades till beginning of this millennium. Indians were
forced to use shoddy sub standard goods made in India, as there was
no other choice. Clever manufacturers from Ambarnath started printing
a line “ made by U.S.A,” on the product labels with a little
superscript asterisk mark. The explanation was given in a very fine
print on the reverse side of the label that most of the people could
not easily read, as “ Made by Ambarnath XXXXX Association.” 99%
of the consumers never bothered to check the fine print and bought
the goods even at much higher prices thinking that it was imported
stuff, later regretting the purchase as the goods were of very
inferior and cheap quality.

After
reading this, I do not think anyone would question importance of the
label anymore. In today's markets, a product label is the assurance
of the quality. If anyone asks me What's in a label? I would answer
that “Everything is in the label!”